Nearly $100 billion in deposits pulled from banks as officials call the system ‘resilient and sound

A new report shows that nearly $100 billion in deposits were recently withdrawn by customers, leading regulators to again assure the public that the banking system is secure. More than a dozen officials, including Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell, attended a special closed session of the Financial Stability Oversight Council on Friday. A readout from the session indicated that a New York Fed staff member briefed the group on “market developments.” “The Council discussed current conditions in the banking sector and noted that while some institutions have come under stress, the U.S. banking system remains sound and resilient,” the statement said. “The Council also discussed ongoing efforts at member agencies to monitor financial developments.” Other details regarding the meeting were not provided.
The readout was released shortly after the market closed Friday, coincident with new Fed data indicating that bank customers pulled 98.4 billion from their accounts during the week ended March 15. That would have covered the period when Silicon Valley Bank and Signature Bank rocked the industry. Data show that the bulk of the money came from small banks. Large institutions saw deposits increase by $67 billion, while smaller banks saw outflows of $120 billion. The withdrawals brought total deposits down to just over $17.5 trillion, representing about 0.6% of the total. According to Fed data released Friday, deposits have declined steadily over the past year, falling $582.4 billion since February 2022. Money market mutual funds have seen assets rise over the past two weeks, up $203 billion to $3.27 trillion, according to Investment Company Institute data through March 22.